District to challenge tax ruling

The board agrees
to pursue the case to the Missouri Supreme Court if necessary.
Friday, May 21, 2004 | 12:00 a.m. CDT; updated 1:43 a.m. CDT, Monday, July 7, 2008

Henry Lane’s property tax lawsuit may substantially affect the way school districts across the state create and implement their budgets.

In a ruling handed down Tuesday, Judge Edwin Smith of the Missouri Court of Appeals applied the state’s budget laws to school districts, saying they must keep revenues “substantially the same” as the amount budgeted for the school year.

The Columbia Board of Education decided Thursday to challenge the ruling, with the intention of filing with the Missouri Supreme Court if necessary.

Alex Bartlett, attorney for the school district, presented a resolution to the school board authorizing him to file a motion for rehearing in the Missouri Court of Appeals, and if the results are not favorable, to file with the Missouri Supreme Court. The board unanimously approved the resolution, with two members absent.

“I’d give Mr. Lane 55 cents out of my own pocket to get it over with, but that’s not going to get it over with,” Bartlett said.

The Missouri Court of Appeals decided Tuesday that school districts cannot set property tax levies to raise more local revenues than required by their budgets. If the ruling stands, lead plaintiff Henry Lane and his eight co-plaintiffs will be due a collective refund of between $33 and $78, an amount to be decided by the Boone County Circuit Court. Lane’s share of the refund is either 53 or 55 cents.

“It would not be prudent for the board to continue to litigate if the money is the only issue,” Bartlett said.

In the 2001-02 school year, the Columbia School District required $56.2 million in local revenue for its budget. The district set its local tax rate at $4.75 per $100 of assessed valuation, which would have raised nearly $61 million if all taxpayers paid their bills. The district estimated its collection rate at 94 percent, which would have generated $57.3 million in revenue.

In November 2001, Lane filed suit against the district in Circuit Court as the only plaintiff, claiming the levy should have been reduced to $4.67 in order to produce the correct amount of local revenue. Lane did not challenge the district’s estimated collection rate of 94 percent. In January 2002, Lane amended his petition to include 8 additional plaintiffs: Lloyd Haley, Curtis Braschler, Gordon L. Trumbo, Beulah F. Alverson, Ernest W. Greenup, Ronald M. Lucas, and William and Margie Anglen. The Boone County Collector, Pat Lensmeyer, was named as the sole defendant. In April 2002, at the request of the Collector, the district was added as an indispensable party defendant.

Circuit Court Judge Frank Conley denied relief to the plaintiffs in September 2002, after which the plaintiffs appealed to the Western District of the Missouri Court of Appeals. A three-judge panel heard oral arguments Sept. 16, 2003. Their decision was released Tuesday.

Judge Smith, who wrote the decision, said the plaintiffs are due a refund of the taxes, the exact amount to be determined by the Circuit Court. He upheld the decision to deny the suit class-action status, citing the principle of “sovereign immunity,” which protects government entities from class-action lawsuits.

Bartlett took issue with the court’s application of the budget laws, saying they failed to provide an acceptable range for “substantially the same.” He also felt the court incorrectly characterized the taxes as “mistakenly or erroneously paid,” using a statute subsection that should not have been applied.

Lensmeyer said although the plaintiffs will receive a refund, they are the only taxpayers who are eligible to do so.

About 100 taxpayers paid their 2001 property taxes under protest. According to Missouri state statutes, those taxpayers then have 90 days to commence action against the Collector by filing a petition in the Boone County Circuit Court. Since only the nine plaintiffs took legal action, they are the only ones entitled to a refund, Lensmeyer said.

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